The Lemon Fool

Henderson Opportunities Trust (HOT) is the smallest of the three investment trusts run by contrarian fund manager James Henderson (the other two being Law Debenture (LWDB) and Lowland Investment Company (LIC)).

Last year was a tough one for the fund, which has net assets after debts of £88 million. With two thirds of the portfolio in smaller UK companies, HOT was hit by investors' panic selling 'small caps' perceived to be higher risk with their exposure to a forecast weakening in the domestic economy.

The shares dropped 5.5% in 2016 and by December traded 23% below their net asset value. That prompted investors to buy in and the discount has narrowed to 16% today, helping the shares to rally over 15%.